Why deemed extensions aren’t fine for mines

Ranchi, June 22: The recent Supreme Court verdict, which put under scanner mining activities of Odisha companies making do without a formal state nod to their lease renewal applications, sparked a similar worry in Jharkhand.

On May 16, 2014, the Supreme Court directed, as an interim measure, that 26 leases operating on second and subsequent renewals without Odisha government’s nod, would not be allowed to operate.

The order further said that under provisions of Mines and Minerals (Development and Regulation) Act, 1957, renewal applications will be disposed of by Odisha within six months from the date of order.

Although the order was related to Odisha, senior Jharkhand government officials admitted the order’s interpretation would prevail here too.

It is an open secret that many iron ore mines in Jharkhand operate under a cosy arrangement of what is called “deemed extension” — where a firm applies for lease renewal and mines without waiting for the state’s reply — sometimes for years.

In India, a state awards lease to a firm usually for 30 years, while the first extension for the next 20 years comes with the rider that the company must apply for it in the 29th year.

After it expires, firms can apply for another renewal under a section of Mines and Minerals (Development and Regulation) Act, 1957. The state can okay the lease, given it is convinced that it is in the best interests of mineral development.

In reality, renewal of mining leases is a murky exercise between bureaucrats of mineral-rich states and company representatives, given the quantum of money involved.

Jharkhand’s revenue from mining was Rs 3,199 crore in 2013-14 against the target of Rs 3,500 crore. For 2014-15, the target is Rs 4,025 crore, said additional director of mines (Ranchi) V.N. Baitha.

A senior mines and geology official conceded the reality of “deemed extensions”.

“SAIL and some private lessees are operating under deemed extension since long. The process of first or second renewal is cumbersome. Parties concerned need to go through statutory forest, environment, pollution and mine plan clearances again,” he said.

But what he did not say was that “cumbersome” or not, clearances were a must for the area’s ecological health.

Also, no state official wants to play whistleblower on alleged cosy deals struck between district mining officials and companies, in which renewal applications are filed and forgotten.

But, state mines and geology department secretary Arun (he only uses his first name) told The Telegraph the interpretation of Supreme Court orders was being taken seriously.

“We have served notices to lessees operating iron ore mines in the state. One or two rounds of reviews are over. But as a standard practice, we have served notices to companies concerned and asked for status reports,” Arun said.

The main district to look at would be West Singhbhum, with 42 leases of iron ore mining. Of them, 17 are captive mine leases, used by SAIL, Tata Steel, among others, for steel production, while as many as 25 trader lessees mine ore to sell in the open market.

Arun said the government would follow legal norms. “If the companies are proceeding legally, they will pay royalty. If illegal procedures are involved, companies need to pay the state the cost of ores mined,” he said.